20000410

Prices fall modestly

in long wait for

cotton policy

SHAFI AHMAD SYED

KARACHI: A couple of factors led cotton prices to decline modestly during the week ended on April 8, 2000, market sources said. A long wait for the cotton policy which acts as guide for the growers, was the main reason, they added.

The Niab, which opened the account at Rs. 2138.75, wound up at Rs. 2010; K-68 commenced the week at Rs. 2311.25 and ended at Rs. 2294.00; and MNH-93 started at Rs. 2332.75 and closed at Rs. 2350.00, with sales tax.

WORLD SCENARIO

Cotton futures in New York showed some strength at the opening session and weekend also showed some strength, but the rest of the three days maintained depressed trend. The overall loss in cotton futures appeared to be nearly four cents, which is tremendous. The opening session in New York rose slightly on modest amounts of trade buying which essentially offset earlier speculators pressurise in quiet trading.

May contract crept up 0.25 cent to finish at 58.39 cents a pound, trading in the range of 58.45Ñ57.40 cents a pound.

As the market proceeded on, weakness overtook the cotton futures. The result was that May plummeted 0.72 cent to end at 55.68 cents a pound ranging from 57.15 to 55.51 cents a pound. The distant July lost 0.74 cent to 57.66 cents and new crop December dropped 0.14 to 60.16 cents a pound.

INORDINATE DELAY

Cotton growers in Lower Sindh are absolutely ready to start sowing. And, in some areas sowing has already started but the enthusiasm with which growers prepare their fields and plan sowing is absent this time. Cotton policy, which amounts to a thorough guideline in respect of land area to be used, money to be spent on inputs etc, has been delayed. Unfortunately, there have been reports which indicate that there are differences between agriculture and commerce ministries. It is hardly to be overemphasized that cotton is a cash crop and it is also acknowledged as the mainstay of our limping economy. We would like to think that these reports are not true because they may lead to consequences which Pakistan's economy can hardly withstand.

However, before CE's six-nation tour reports appeared in the newspapers that cotton policy was ready and CE on return will announce the policy himself but it is much to the changing of the growers and others it is perhaps being given finishing touches.

PRICES WEAKEN

But for the lurch in which relevant cotton people are in, the prices of cotton, which had maintained bullish sentiment, nearly crashed at the week-end. The ginners, who have nearly 700,000 unsold bales of cotton and were making most of it, finally surrendered. However, trading did not pick up as ginners had expected. The spinners who are well organised, according to the market sources, nearly achieved their objectives.

TAIL PIECE: Except once, that TCP may invite open bid, nothing has been heard since. It was spinners' cherished derive that TCP releases remaining over 300,000 bales of cotton to them instead of selling only to our competitors abroad. In local markets, cotton prices are selling between Rs. 1800 and Rs. 2000. The TCP cotton is worth Rs. 1500 per maund which is Rs. 400 to Rs. 500 cheaper then they are buying from the local markets. It is expected that the suspense over this issue will be over soon.